African Gold controls five contiguous gold concessions in Ghana.

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Better Grades Over Bigger Intervals
African Gold has the results, so why hasn’t the market caught up?
~ By Ted Niles, November 11th, 2010
Mike Nikiforuk is baffled. The President of African Gold Group Inc. explains, ing 456 square kilometres. Exploration of these holdings is, as Nikiforuk
“If you look at companies in our peer group that are trading at three and four admits, “at a very early stage,” but one gets a good idea of their potential
times our market cap, companies like Orezone or Volta or more recently from other miners in the area. The 120-kilometre radius surrounding their
Keegan in Ghana, our results are far stronger intercepts of gold mineraliza- concessions—with properties owned by such companies as Newmont
tion—better grade over bigger intervals.” Mining, AngloGold Ashanti and Gold Fields—has resulted in the discovery
of 150 million ounces of gold. Of particular interest is Keegan’s Esaase
Nikiforuk is right; the results are there, a string of them. November 10 as- concession, which is contiguous with the Asankrangwa Gold Belt, and
says from the Kobada Gold Project in Mali reveal 2.08 grams per tonne gold 94% of that Belt is held by African Gold. Keegan reported a 2009 mineral
over 53 metres (including 9.12 g/t over 4 metres), 0.91 g/t over 90 metres, resource estimate for its Esaase Project of approximately 2 million ounces
1.71 g/t over 16 metres, 1.34 g/t over 36 metres, 1.97 g/t over 26 metres, gold indicated and 1.45 million ounces inferred.
1.03 g/t over 41 metres and 1.42 g/t over 26 metres. November 4 assays
included 1.04 g/t over 125 metres and 1.29 g/t over 90 metres, while August
31 assays included 2.11 g/t over 44 metres and 1.65 g/t over 17 metres.
“
“The drill holes are exceptional,” Nikiforuk declares. “This is beyond eco- The drill holes are exceptional
nomic grade over mineable width.”
—beyond economic grade
These results validate the company’s confidence in Africa. But African
Gold found success there only after a false first step. They started in the
over mineable width
Congo, but it was a short-lived venture. By 1998, with that country on the
brink of the catastrophic Second Congo War, they reluctantly pulled up
stakes. “We were taught a very significant lesson in terms of geopolitical - Mike Nikiforuk
risk,” Nikiforuk explains.
Both Mali and Ghana rank in the top three of the continent’s biggest gold
producers after South Africa. Perhaps more important, both are, according The first resource estimate for Kobada, in 2008, was 740,000 ounces of
to US Aid for International Development, “stable and democratic.” gold at 0.3 g/t cut-off, but Nikiforuk expects a substantial increase. “Ninety
percent of the ground remains to be tested through general exploration
African Gold acquired its first Ghana landholdings in 2003 and went public activities. We fully anticipate discovering additional satellite deposits in the
in 2004. “We raised approximately $35 million in a half-dozen tranches to magnitude of a half million ounces, and we believe that our potential within
develop the portfolio, with a primary focus on our Kobada flagship asset,” the oxidized profile of the first 100 vertical metres of the project is in the
Nikiforuk says. “The deal was struck to acquire Kobada in 2005 from an magnitude of three million ounces.”
organization of the French government and was closed after some due-
diligence drilling in 2006.” Kobada has the gold—and the infrastructure. It’s seven kilometres from
the Niger River, a sizeable advantage in a part of the world where, as
African Gold controls five contiguous gold concessions in Ghana, compris- Nikiforuk notes, “You either have too much water or none at all.” It is
approximately 45 kilometres from the Sélingué hydroelectric dam and a
three-and-a-half hour drive from Bamako International Airport.
West Africa’s potential to be an outstanding gold resource was confirmed
in September when Kinross Gold Corporation acquired Red Back Mining
Inc. for $7.1 billion. In light of this, Nikiforuk is keeping his options open. “If
the right proposal were to come on the table, I can see us being acquired
on a friendly basis,” he says. “One of the things that intrigues us most is
joining forces with a company within our peer group, so that our assets
combined with their assets and balance sheet would be worth far more
than the two of us standing alone.”
For now, however, African Gold’s stock price continues to languish, and
people are starting to ask why. Thom Calandra of Stockhouse recently
bemoaned the lack of “investor respect” for the company, pointing out that
“every few weeks, in yet another round of results, the stock goes no-
where.” He predicted that African Gold’s $45-million market cap “likely will
step out soon.”
Nikiforuk agrees. He concludes, “We’ve got quite a strong interest in the
project from a variety of players, either our neighbours or those who are
very interested in the West African theatre—a theatre which has the big-
gest spotlight on it in the world.”
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